Director Roles & Duties

Looking for help with the duties of being a director?

The Companies Act 2006 governs the general duties of a director of a UK limited company. Directors have authority to bind the company to contractual arrangements and obligations, and to incur liabilities on its behalf.

This authority has certain caveats which must be considered by prospective directors as well as shareholders. Directors are usually employees of a company, notwithstanding that they will have more power and responsibility than their colleagues. It is therefore vital that their rights, duties and authority are properly documented within their employment or service contracts.

At Mercantile Barristers, our barristers are adept at understanding the particular standards required of decision makers and leaders in your business; advising on the most appropriate form of agreements to curb or expand a director’s authority; and drafting appropriate employment or service contracts to protect the business.

Within a director’s service contract, it is important to include clauses that require a director to act within their powers; promote the success of the company; exercise independent judgement; exercise reasonable care, skill and diligence; avoid conflicts of interest; avoid accepting benefits from third parties; and to declare all personal interests in proposed transactions.

In addition to these general duties, a company may want to impose other duties on the director and these should also be included in the service agreement together with the consequences of failure to comply.

It is not uncommon that directors may also hold shares in the company. As such, shareholders’ agreements and employment or service contracts ought never to contradict each other but should always work together to stipulate the consequences for breach of either document.

For example, a majority shareholder may not want a director that has been dismissed for gross misconduct continuing to hold shares in the company. Our barristers are available to advise on such provisions.

Our members at Mercantile Barristers are Public Access Trained and are happy to be consulted by and accept instructions directly from professionals and discerning private clients at any time (for direct access barristers). To book a consultation with one of our Direct Access Barristers in London please call us and speak to our clerks who will find the best-placed barrister for you.

WORKING WITH BARRISTERS BEFORE 2004

Historically, barristers in England & Wales could only accept instructions from solicitors and could not be consulted directly by members of the public. Barristers were considered to be too expert and too specialist to deal directly with lay clients.

It was left to a solicitor to first determine whether the legal problem that has arisen required the involvement of the expert barrister. If so, it was only the solicitor that could instruct the expert barrister on behalf of the lay client. Using a medical analogy, it is akin to having to see your GP before being referred to the Specialist Consultant.

NO ISSUES WITH DIRECT ACCESS BARRISTERS METHOD

In this traditional mode of operation the lay client continues to pay for his solicitor while also paying for his expert barrister. While this has always been the case, it is unnecessary in certain modern circumstances and inevitably commercial pressures and modernity has brought a change. Professionals such as company directors, agents, architects, surveyors, construction engineers and other specialist consultants may not require hand-holding by a solicitor in order to consult the expert barrister about their case.

ADVANTAGES OF INSTRUCTING DIRECT ACCESS BARRISTERS

A change in the law in 2004 allowed barristers, who have undertaken additional training, to advise clients without the need for a solicitor and listed below are some of the reasons why it is advantageous to instruct a direct access barrister.

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